As Singapore doubles its EV adoption efforts by announcing its ambitions to install 60,000 charging points nationwide by 2030 – more than double its original target of 28,000 – EV automakers are expected to step up their presence here.
There are already a handful of EV automakers in Singapore vying for the automotive market. Tesla is one of them now, as it recently received the green light to sell electric vehicles in Singapore.
Image credit: CleanTechnica
Tesla, the world's leading supplier of electric vehicles by market capitalization, will dominate the industry for years to come.
While some expect their market share to decline as soon as traditional automakers switch to electric, Tesla has some advantages that make it difficult to track. Here are some reasons why.
Vertical integration
The move to the production of electric vehicles will mean the need to rebuild an entirely new manufacturing capacity, which cannot be easily achieved overnight.
Some automakers like Volkswagen and Jaguar have already announced plans to go fully electric this decade, but it will take a lot of resources, time, and outside supplier relationships to make that happen.
Making an electric vehicle is different from making vehicles with a combustion engine (ICE). In addition to a comprehensive understanding of battery technology, you need both hardware and software know-how.
With this expertise only being acquired at the beginning of the EV industry, these automakers are unable to make internal breakthroughs in EV technology – either in terms of battery innovation, AI and autonomous driving, or energy storage. or all of these components together.
To cut costs, most of these "old" automakers need to outsource at least one of these three key factors to stay in the race. However, you may be at the mercy of suppliers and rely on third-party product services.
Tesla, which began its journey as an EV company much earlier than its ICE competitors, vertically integrated its design, engineering, software development, research and manufacturing capabilities from the start.
At nearly every stage of manufacturing, Tesla's teams are structured so that the design of each component goes hand in hand with the design of the machines from which those components are made.
For example, to increase efficiency in the manufacturing phase, Tesla's engineering, construction and production teams have come together to develop a new casting method that will make the battery a structural part of the vehicle.
Not only does it save space, it also packs more batteries, strengthens the structural integrity of any car and ultimately saves time on assembly. So it's much more efficient than what other automakers do.
Data and autonomous driving
To be successful in these three categories – battery innovation, AI and autonomous driving, and energy storage – you need a lot of data to constantly improve, learn and update.
Photo credit: David Paul Morris via Bloomberg
When it comes to AI and autonomous driving, no other gamer can match the amount of data that Tesla has collected, as all Tesla 3s and Ys on the road today come with the autopilot feature that comes with it.
This means that Tesla has more data than its competitors to learn from and improve on.
As noted by Cathie Wood of ARK Invest on CNBC, the company with the most and best quality data on real-world driving will win the race in autonomous vehicles.
According to her, Tesla is way ahead of everyone else with data on driving in the real world of 30 billion miles. The next company to come close is Google with 30 million miles.
This also has implications for the future when self-driving taxis are the order of the day.
Once the legal hurdles for fully autonomous vehicles are overcome, Tesla's lead on the ground means more accurate and reliable data, so autonomous driving software is more likely to be widely adopted.
Battery technology
Another reason Tesla is becoming the EV category leader is because of its commitment to revolutionizing the way batteries are made.
Image credit: Electrek
EV cars use lithium-ion batteries – this is the same type of battery used in our smartphones and laptops, but in much larger quantities.
The technology used to source and manufacture these batteries has remained largely unchanged since the early 1990s. This is a process that must change to meet the growing demand for electric vehicles in the years to come.
The tipping point for widespread adoption largely depends on the price of the vehicle, which can be lowered significantly once average battery prices go beyond what is achievable on a scale alone.
Tesla isn't waiting for an electronics company to find out.
The company has already started to re-create and revolutionize not just how the batteries are made, but how they are sourced and the way each individual mineral significantly lowers the cost per battery.
During Tesla's Battery Day, CEO Elon Musk spoke about how Tesla's approach is to never accept current material manufacturing processes and to find new ways to reduce efficiency and cost per material at all levels.
As an example, Tesla developed new methods of extracting lithium from the earth that reduce costs and increase efficiency, while reducing waste in ways nobody had thought of before.
That way, we're likely to see more affordable Tesla cars that don't compromise on performance. This is another major Tesla selling point.
Compressors and the Compressor Network
Fear of range is a real problem and a barrier to entry for many car buyers.
Knowing that you have to sit long at a charging station is a big lifestyle change compared to just five or ten minutes at a gas station.
Therefore, to be a successful electric vehicle company or brand, you need to address the long charging time issue.
While there are a growing number of EV chargers around the world, very few charge a car as quickly as a Telsa Supercharger does with a Tesla car.
For Tesla it is already the third version of the supercharger, with which you can cover 250 km in 15 minutes.
When the Shanghai plant pumps these out, there will be nearly 10,000 new compressors per year, adding to the 20,000 units already available worldwide.
Since these chargers are exclusive to Tesla vehicles, owning a Tesla before any other electric vehicle is a huge advantage.
However, with many traditional energy and oil and gas companies investing heavily in charging technology, this is probably the quickest way for competitors to gain the most ground through partnerships.
Tesla Model 2: The cheapest model yet
Another major factor that will add to Tesla's growing dominance in the EV industry is the launch of the cheapest model yet: the currently unnamed Tesla at $ 25,000.
Tesla Model 2 / Photo credit: Tesla via Weibo
The car, dubbed Model 2 by industry commentators, will be the cheapest Tesla to date. It's $ 10,000 cheaper than the base Model 3, which is currently the best-selling electric vehicle in the world.
It is also comparable to other entry-level electric alternatives like the Nissan Leaf ($ 32,000), the Hyundai Ioniq ($ 33,000), and the Mini Cooper SE ($ 30,000).
Most rumors point to a hatchback design for the Model 2, which will be manufactured at Tesla's Shanghai factory in Tesla.
While the launch was originally announced in 2023, rumors from China are optimistic for an announcement in late 2021 and a 2022 launch for the new electric vehicle, according to industry commentators.
Although prices have not yet been announced in Singapore, we can assume that the price for the Model 2 will be between S $ 90,000 and S $ 100,000 before the COE.
The introduction of the Model 2 is likely to cause an explosion of Tesla vehicles around the world, given the price.
Instead of traditional automakers, the likely source of competition in the near future could come from other EV companies, most of which are from China.
Hong Guang Mini / Photo credit: Shunsuke Tabeta via Nikkei Asia
For example, state-owned SAIC Motor recently announced a $ 4,500 EV called the Hong Guang Mini, which is far cheaper than anything Tesla currently has to offer.
The car is being built in partnership with General Motors (GM) and may be the model for other ICE automakers looking to take on Tesla.
A look at what has happened in other industries
Some believe that Volkswagen, Toyota, GM, Ford, and Hyundai are too big to keep Tesla leading in electric vehicles for long.
However, if we look at the smartphone industry, the market looked different in 2010 than it was in 2000. Nokia, Sony Ericsson, Siemens, HTC, O2 and Blackberry did not survive the smartphone revolution.
While having proprietary technology and software, R&D facilities, long-term contracts with suppliers, and the like, many of these companies either lost massive market share or are no longer in the consumer phone business.
Photo credit: CHS Global
Sure, Apple and Samsung were big companies back then. Apple wasn't a leader in computers when the iPhone hit the market, however, and Samsung didn't release its first smartphone until 2008.
They had to learn a lot of new things and develop new ways to build all of their current products, just like Tesla is doing now.
With all the competitive and technological advantages Tesla now has, they will eventually be the category leader, way ahead of any older automaker.
The Tesla fandom is real
Aside from comparing Apple, I think Tesla enjoys a fandom that can only be compared to Apple.
Elon Musk, CEO of Tesla / Photo credit: Reuters
There is a growing group of people who worship Tesla and Elon Musk as much as Apple fanboys Apple and Steve Jobs.
Not everyone is becoming die-hard fans, and buying behavior is one every 15 years instead of buying a new iPhone every 2 years, but that's the same time gap that competitors will face.
Diehard Fan or not, I think a significant group of people who buy Tesla are going to buy one, not because they were in the market for an EV, but because they were in the market for a Tesla – it's just that EV . The competition doesn't have that.
Considering a Nissan Leaf asking an iPhone user to switch to an Android, as an iPhone user, I can't stand the thought.
Selected image source: Tesla
